Introduction

Jim Fredrickson

Jim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here.
If you do well as a result of suggestions made here, feel free to say thank you :)
BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya
Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.

As you all must know by now, I am a trader at heart, not an investor. It’s always been difficult for me to buy-and-hold, because I feel like I can see where corrections will take place, so why not sell if you know its coming?

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But these last few days I am having a slight change of heart. There is so much money pouring into the cryptocoins, and there is no reason to believe that will stop soon. In fact, the amount of money pouring into there might just keep on increasing for years.

Case in point. Bitcoin. The last 2 times I saw a selloff was due, they both occurred, but were very weak corrections. That can only mean that there are a lot of buyers out there. Not like the old days when there was a small handful of crypto-traders. At that time, when a correction occurred there were no more buyers left – everyone was all in – and price plummeted.

So who are these new buyers? It doesn’t matter, but it seems likely that many of them have never heard of the altcoins. Last week they want to buy Bitcoin at $1800, but neglected Litecoin and his siblings at far cheaper prices. I don’t think that this ignorance will continue forever. One day in the not-distant future money will likely be pouring into the altcoins as well.

So it occurs to me that now the smart thing to do is just buy a ton of cheap coins, the ones that are moving, and sit on them. For example for every 10,000 XLM or XRP one buys, every 1 cent rise in price is worth $100. Is there anyone who doubts that the price of these coins will be more than $1 by the end of the year? They might be closer to $10 or $20. What if you bought 500,000 or a million of them while they are still cheap? That’s what the so-called Bitcoin whales did 5-6 years ago. With 500,000 of these cheap coins, every 1 cent rise is $5,000.

It seems like those of us lucky enough to be on this train at this juncture have a once-in-a-lifetime opportunity.

Like I said, it has taken a truly profound realization that we are in the beginnings of what might be a monster multi-year bull market to make me realize that investing is a better option than trading …

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Speaking for myself, I will likely not short any market. When I see a correction coming I will look to buy more if I can, at lower prices. Its like we are in 1977 and buying yahoo and Microsoft stock at $1 a share, particularly in the case of the still really cheap altcoins that are seeing some volume.

DASH

DASH has been superglued to a 3rd arc pair for some time now. It is one right side of the pair now. Perhaps falling to the top of the square will be enough to shake it free.

Ethereum Classic

ETC has been moribund since hitting the 3rd arc. When it gets to the arc again, let’s see what she does.

Ethereum

ETH has been stuck in an arc pair for some time. But it appears that she will be forced to either break up or break down. My guess is she will break upwards.

Litecoin

LTC corrected at the end of a square. She will test that 4th arc again soon. My guess is she will penetrate it.

Augur

Augur has had plenty of time to advance since clearing the last arc. The fact that she has not means she probably will continue moving sideways to the next arc.

Bitcoin

XBT corrected at the 3rd arc of this setup as expected. But it was/is a weak correction. My guess is that the arc will yield on the next test. Next resistances are $2600 (4th arc) and $3600 (5th arc).

Stellar Lumens

I like Stellar Lumens. I see that the 2nd arc has been a problem though. If the next test of the arc fails, price will likely fall. If it does, I will use the opportunity to buy more.

Remember: The author is a trader who is subject to all manner of error in judgment. Do your own research, and be prepared to take full responsibility for your own trades.

Jim Fredrickson

Jim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here.
If you do well as a result of suggestions made here, feel free to say thank you :)
BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya
Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.

Posted on 11:54 am May 14, 2017.

On point as always.
When the price of a few alts went down recently, I did wonder whether to sell and buy again after the correction, but I didn’t see the point, as the corrections were quickly overcome. The principles of value investing apply perfectly in the current environment. Buying great assets at very cheap price… What else would you need?

Posted on 2:43 pm May 14, 2017.

I only tell you what I see. Sometimes I see things correctly, sometimes I miss things. What traders do with my thoughts is of course up to them.
XLM has just made a bullish move after a long sideways move. (I hate sideways moves the most, personally. It is so very easy to get lost.) But after a bearish fakeout, the 2nd arc that has stopped XLM for quite some time has apparently yielded. The candle has not closed yet, but the penetration is convincing.
As for XRP, I see a short term bearish case, and a longer term bullish case.

Posted on 12:23 pm May 14, 2017.

There is a lot of analysis out there predicting XRP fall. The picture I see is that XRP is quite strong and will continue to rise for the reasons mentioned in the beginning of the article. What do you think?

Posted on 12:27 pm May 14, 2017.

I see your point. There is a bullish case to be made for XRP. But I also see a bear case, though the bear case is short term. Longer term there is not much doubt that the XRP price will be much higher in a month’s time. (imho)

Posted on 8:56 pm May 14, 2017.

I know that you are not a big fan of rumors, however, it is very likely that Ripple will announce tokens lock-up on May 22 during the Consensus conference (https://twitter.com/coindesk/status/859105209854906373). This means an instant increase in value due to decreased amount of tokens in the system. So if there would be a bearish move, I’d use it to buy as much as possible during this week and sit quietly 🙂 What do you think?

Posted on 8:49 pm May 14, 2017.

As much as I want to believe the multi-year bull market talk. My logical side is screaming at me to be careful here. Are we in exuberance? I don’t know. The landscape is different than 2013. There are more technologies being developed and it seems that pricefinding is in the offing.
Despite elevation, your suggestion to snag up cheap coins on good projects could do well.

Posted on 12:30 am May 15, 2017.

As always thanks for the great analysis really am greatufl, I wanted to ask can you recommend the top 3 cheap altcoins to buy while their cheap? Also I sold my XRP for the time being but looking to get back into XRP as soon as you give the signal.

Posted on 1:48 am May 15, 2017.

If XRP makes a high above the last two tops (~.23) then it seems the danger will have passed. I note that the coin did turn down at the end of square as seemed likely, but did not fall hard. Its possible that it was a false alarm.

Posted on 1:49 am May 16, 2017.

Posted on 7:03 am May 16, 2017.

I am glad to hear about segwit, but don’t think you can use news like that for short-term trading. long-term it is likely relevant, but as you can see, traders, if anything, sold the news. one of the reasons i don’t use news to trade.
ltc likely has a few more dollars to correct.

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